Caterpillar to Phase Out of Tunneling Business

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Caterpillar Tunneling has built more than 250 TBMs since its founding in 1972, including four machines for the Toronto-York Spadina Subway Extension project (pictured).

Caterpillar Tunneling has built more than 250 TBMs since its founding in 1972, including four machines for the Toronto-York Spadina Subway Extension project (pictured).

Caterpillar Tunneling Canada Corporation (CTCC) notified employees that it will exit the business and cease production at its facilities by mid-2014, according to a company-issued press release on May 2. Caterpillar purchased Lovat Inc., which is known today as CTCC, in 2008, as its entry into the tunnel boring business. The company has since determined the business no longer represents a strategic growth opportunity.

“We continuously evaluate our strategic portfolio to ensure alignment with our long-term strategy and have concluded the tunneling business no longer fits that strategy,” said Stu Levenick, Caterpillar group president with responsibility for Customer & Dealer Support.

“As a result, we have elected to exit the business. We know this is difficult news for our employees and their families. We acquired a great team when we bought this company, and while they have demonstrated an ability to build quality products, the future prospects of this business no longer align with our expectations.”

The decision will impact approximately 330 employees. CTCC is offering its employees a severance package and will work with appropriate agencies on outplacement services. CTCC will honor current contractual obligations to existing customers, including the assurance that after-sales support needs are satisfied. Caterpillar has committed to provide parts and service support through 2016.

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3 Comments

  1. Mark Griffith on

    It was a shame when the Lovat name was changed to Caterpillar and it is a sad day again with this news. As stated in other comments here, the TBM business is not the same as pumping out 5000 forklifts a week. It takes vision ad problem solving skills that must be used on a daily basis, often times even after the machines are in the field. I would have thought that Cat would have done better than this. I guess I will take some extra pleasure the next time I’m in the cab of something built by John Deere

  2. Paul Nicholas on

    I agree with Travis its a shame to see Famous tunneling names leaving the market just the change in name from Lovat to CTCC lost them market share. Tunneling requires dedicated people who love the industry and its risks do not fit the corporate model so many names have gone or are going the same way eg Markham, Wirth & Robbins but Robbins was resurrected again as a family run business with dedicated tunnel people lets hope the same happens to Lovat.

  3. Travis Matthews on

    It is sad to have watched CAT drive LOVAT out of business with there business mentality that took the family oriented way that Richard Lovat operated from the 1970’s until the sale. I had spent time at the factory and it was as though every person working there was treated like family and they also worked like it. During the sale they were told nothing would change and as soon as everything was final everything changed and not for the better. It is to bad to see such a corner stone in tunneling go away and put all of these dedicated employees out of work.